MUTUAL FUND FOCUS

Investing in mutual funds can seem daunting – but it doesn’t have to be hard. Use this step-by-step guide to understand what happens when you invest in a mutual fund.

Purchasing mutual funds

Define your goals

Think about why you’re investing and when you’ll need your money. Different types of mutual fund accounts have different rules about taxes and withdrawals, so the account type you choose should align with your investing goals:

• Saving for retirement? Consider an Individual Retirement Account (IRA)
• Putting money away for your kids? Check out a Coverdell Education Savings Accounts (ESA) or Uniform Transfer To Minors Accounts (UTMA)
• Focused on other goals, like saving money for a big purchase or a down payment? There are general investment accounts, too.

You’ll need money to invest—you can get started with as little as $50 a month in a Thrivent Mutual Fund. How? By using an automatic investment plan It may not seem like a lot. But starting small and starting early could potentially pay off big over time.

Finding your mutual fund

There are many funds to choose from:

• Asset allocation funds are designed to match the level of risk investors are willing to take in exchange for greater growth potential.
• Other funds focus on specific aspects of the economy—like natural resources or utilities—or on certain types of stocks and bonds.

With so many fund options and types, it can be helpful to compare funds. For an overview of mutual funds and how they work, check out What is a Mutual Fund?

Thrivent Mutual Funds offers more than 20 funds across four categories—enough options to cover most mutual fund investing needs without being overwhelming.

Setting up an account

Once you know the type of account you need, the amount of money you’re going to start off with, and which mutual fund best aligns with your goals, you’re ready to set up a mutual fund account. Different accounts need different things to complete the application. Here’s an example of the types of information you may want to have handy.

• Full names of people to be included as account owners and beneficiaries.
• Social Security numbers.
• Your bank account number and the bank’s routing number.
• Contact information, like email and phone numbers.

Investments over time

Track investment progress

A mutual fund account doesn’t require very much day-to-day oversight on your part. Fund managers and analysts for Thrivent Mutual Funds strive to keep the fund’s holdings and allocations in line with the fund’s strategic goals and level of risk—so you don’t have to.

And you can access account details online.

Deal with taxes

No matter the account type you’ve chosen, you’ll probably receive tax forms every year. These will be mailed to you and available online. Be sure you share all tax forms you receive with your tax advisor.

Re-evaluate investments & make adjustments

From time-to-time, check back in on your investing goals and risk tolerances to ensure your investment approach still fits your future needs. You’ll want to consider whether to increase your retirement contributions, especially if your income increases over the years. You’ll also want to revisit the beneficiary designations you’ve made to be sure they’re up to date and reflect the way you want to pass along your investments.

Weather the markets – ups and downs

When you invest in the market, there are going to be good days and bad days. Because most mutual funds are structured to have diversified holdings, these inevitable market swings can be made much more tolerable. Keep in mind that while diversification can help reduce market risk, it does not eliminate it.

Withdraw investments or pass along

Withdraw funds

Once you reach your goals or you reach a certain age, you’ll need to think about what to do with your mutual fund investments. If you have a general investment account, you’re free to withdraw your money at any time without restriction.

If you’ve invested in a retirement account, here are some options:

• At age 59½ or over, you can start taking withdrawals without penalty from IRAs. You can take withdrawals sooner, but you’ll face a 10% penalty unless you meet certain criteria.
• At age 73, you’ll need to begin taking required minimum distributions (RMDs) from a traditional IRA, 401(k), or other similar retirement savings account
• Roth IRAs don’t require any withdrawals by the current account holder. This means that you can pass the account to your beneficiaries as an inherited IRA if you wish.
• Remember, your beneficiaries can also be charitable organizations, and distributions can be used to donate to charities.

Ultimately, there are potential tax ramifications for both you and your beneficiaries whenever you take a distribution from a mutual fund account, so it’s wise to discuss all of this with your tax advisor.

Whatever goals you set and whatever you decide, make sure to do your research and consider all your options.